Calicut Branch of SIRC of ICAI WELCOME TO

Calicut Branch of SIRC of ICAI WELCOME TO Presentation On Real Estate (Regulation And Development) Act, 2016 On 7 th Oct, 2017 at Calicut -By CA. Shilpa Shinagare

Ø Highly unregulated sectors in spite of many laws. Ø Lack of transparency in projects Ø No proper information about the builder Ø Lack of Easy and Quick Redressal Ø Possession not given in time. Ø Do not provide OC and Completion Certificate Ø Demand Additional amount in cash Ø Do not Form the Societies or give conveyance. Ø Do not provide with all the agreed amenities. Ø NO accounts are provided for maintenance Ø Parking and open spaces are sold Ø Fraud, cheating by unscrupulous builders Ø Approved Plans, title deed not proved. Ø Flat areas are sold at Super Built up etc.

REAL ESTATE (R &D) ACT CAME INTO FORCE IN MAY -2016

Intro: The Real Estate (Regulation and Development) Act, 2016 Ø RERDA-2016 is an Act of the Parliament of India Applicable to whole of India except Jammu and Kashmir Ø The bill was passed by the Rajya Sabha on 10 th March, 2016, by the Lok Sabha on 15 -03 -2016 & Notified on 26 -03 -2016 Ø Came into force : 1 May 2016 with 59 of 92 sections notified. Ø All remaining Sections came into force on : 1 st May, 2017 Ø In Kerala – Rules are yet to be notified. Ø The Real Estate Regulatory Authority yet to be set up

THE REAL ESTATE (REGULATION & DEVELOPMENT) ACT , 2016 Objects of the Real Estate(R &D) Act, 2016 Appellate Tribunal 4 Objects Regulatory Authority 2 1 Regulation & Development 3 Transparency and Efficiency Protecting Consumer Interest

MOTHER OF REAL ESTATE DEVELOPMENT LAW Real Estate (Regulation &Development)Act, 2016 Applicable All Over India Except J & K Implemented through all the connected Central & State Law applicable Related to Owning / acquiring Rights Concerned with Flats, Building, Development, Plots Commercial, Resiential Freehold Rights Leasehold Rights

APARTMENTS = INDEPENDENT UNIT/PLOT Residential Flat Office Shop Garage Bunglow Any Constructed Developoped or to be Constructed Plot Structure Industrial Gala Office Provided or agreed to be provided by the Promoter To the Purchaser for a Consideration

PARTIES ON WHOM OBLIGATIONS ARE MADE APPLICABLE under RERA 1. Promoter Land Owner RE Agents, Professionals Contractors and other Agencies Connected with RE Projects Builder / Developer Single 3. Allotees (Flat Buyer/s ) Group 1. Individual, 2. Firm. 3. Company, 4. Assn of Persons, 5. Govt. , 6. Semi Govt. 8. Local Authority 9. Trust 10. Society – u/SRA, 11. Co-operative Society u/ MCS of MSC 12. LLP or any other person or group of persons.

Salient Features of the Act Real Estate Project Registration Real Estate Agent Registration Filing of Complaints Financial Discipline Transparent & Consumer-oriented

Functions of RERA Administrative Regulatory Executive Judicial Advisory

Responsibilities of Promoter Registration of project with RERA Declaration by promoter 70% amount to be deposited in bank A/C No ads without registration Obligations of promoter for veracity of ads Sec. 2 (zk) defines promoter. In layman’s language it means Builder

THE SALIENT FEATURES OF THE RERDA-2016 • To Establish a Regulator : by Appropriate Govt: - For each State by respective State Govt - For Union Territories by Central Govt • Accreditation : By Mandatory registration of : -Real Estate Projects by Promoters & - Real Estate Agents • Mandatory public disclosure norms : - Details of developer, - Details of the project, - land status , - statutory approvals and - contractual obligations;

Obligations of promoters : • - Sec-3 : Register the project with the authority before offer to sell. - Sec- 4 : Upload 5 yrs track record and project details on website. - Sec 4 : deposit 70% of buyers in a separate scheduled bank account, to be used for land cost and construction after certified by Architect , Engineer and Chartered Accountants. & Audit. - Sec 11 Disclose all the details of the project to customer - 11 Form the society on booking majority flats - Sec 12 Liable for damages for any misinformation in Advt. - Sec 13 Register the agreement before receiving more than 10% Sec 14 - Adhere to approved plans & project specifications Promoter is liable for 5 years defect liability Sec 15 : NOC from 2/3 rd and Authority to create third party interest Sec 16 : Take insurance of Title and building. Sec 17: Transfer the title within 3 months of OC Sec 18 : Refund , compensation and interest on default.

THE SALIENT FEATURES OF THE RERDA-2016 • The Authority to act as the nodal agency : - To co-ordinate efforts in development of the sector - To render advice to the appropriate Government to ensure the growth and promotion of a transparent, efficient and competitive real estate sector; - To establish dispute resolution mechanisms for settling disputes between promoters and allottees/ buyers; • Powers to make Act, Rules, Regulations , Direction etc: - Central Act uniform across India except J & K; - States to have powers to make rules - Regulatory Authority to make regulations; - Central Government to issue directions to States.

THE SALIENT FEATURES OF THE RERDA-2016 • Dispute resolution mechanisms: - Adjudicating officer to assess damages - Regulatory Authority to settle any Disputes - Real Estate Appellate Tribunal to hear appeals - Jurisdiction of Civil Courts barred - Consumer Courts to continue. • Penal provisions : - To ensure compliance of Provisions of Act - To Comply with orders of the Adjudicating officer, Authority and Tribunal

THE REAL ESTATE (REGULATION & DEVELOPMENT) ACT , 2016 REAL ESTATE Regulatory Authority : Not a separate Approval Authority 2 Promoters: To get approval from Competent 1 Authority: Planning and local Authority like PMC, MCGM etc. Screening Authority between Promoter & Purchasers Collect all the Information , Approval, Documents & persons involved in the execution of RE Project & Grant Registration & Redress Disputes 3 Flat Purchasers and Consumer to transact with Promoters.

U/S. 3 COMPULSORY REGISTRATION OF REAL ESTATE PROJECT FOR DEVELOPMENT OF ANY IMMOVABLE PROPERTY IN PHASES OR OTHERWISE And REGISTRATION EXEMPTED All Pending Projects where OC is not received within 3 months And New Project before offer for sale. AREA DOES NOT EXCEED 500 SQ. METERS OR Less than 8 Units All Completed Projects Where OC is Granted. RENOVATION OR REPAIRS WHICH DOES NOT INVOLVE REALLOTMENT & MARKETING

U/S. 4 DISCLOSURE OF INFORMATION BY THE PROMOTER By Registration of the Project for development of immovable property in specified form by paying prescribed fees and by submitting information. No & Size of Layout, phases He has Title & land is free from Encumbrances & Specimen of Agreement for sale Conveyance deed Allotment letter etc Proposed Project & facilities Project to be Completed as per Terms of Registration And schedule of completion Approvals for each phase Project to be Completed Within the period Of sanction by Competent Authority Declaration by Promoter 70% of Realized amt to be deposited in a separate a/c In Sch. Bank For meeting cost Of project

U/S. 7 RECOVACTION OF REGISTRATION OF REAL ESTATE PROJECT On complaint by any Stakeholders Suo moto based on any information, Audit Report etc U/s 8 : Consequence of Revocation or Lapse Debar the promoters From Execution & Accessing Website Complete the Project by the association of allottees or in any other manner. Declare as Defaulter And Display Photographs In All States Website. Freeze the Dedicated account and Transfer the balance To complete the project

RERDA- 2016 Chapter I : Preliminary : Sec 1 and 2 Chapter II : Registration Of Real Estate Project And Registration Of Real Estate Agents – Sec 3 to 10 Chapter III : Functions And Duties Of Promoter – Sec 11 to 18 Chapter IV : Rights And Duties Of Allottees - Sec 19 Chapter V: The Real Estate Regulatory Authority- Sec 20 -40 Chapter VI : Central Advisory Council - Sec 41 and 42 Chapter VII : The Real Estate Appellate Tribunal : Sec 43 to 58 Chapter VIII : Offences, Penalties And Adjudication: 59 to 72 Chapter IX : Finance, Accounts, Audits And Reports: 73 to 78 Chapter X : Miscellaneous : Sec 79 to 92

Rights & Duties of Allottees Rights • Obtain information related to project like site & layout plans & specifications • Know stage-wise time schedule of completion of project, claim possession of property as per declaration of promoter Sec. 4 {2 (i)(c)} • Claim refund of amount paid by promoter on A/C of default of promoter Duties • To pay proportionate share of expenses • To pay interest on delayed payments • Obligation & liabilities to be reduced on basis of mutual agreement between promoter & allottee

SEC. 2 DEFINITIONS (zn) "real estate project" means : - the development of a building or a building consisting of apartments, or - converting an existing building or a part thereof into apartments, or - the development of land into plots or apartment, as the case may be, - for the purpose of selling all or some of the said apartments or plots or building, as the case may be, - and includes the common areas, the development works, all improvements and structures thereon, - And all easement, rights and appurtenance belonging thereto;

SEC. 2 DEFINITIONS 2(d) means : - the person to whom a plot, apartment or buildings, as the case may be, - has been allotted, - sold (whether as freehold or leasehold) or - otherwise transferred by the promoter, and - includes the person who subsequently acquires the said allotment through sale, transfer or otherwise - but does not include a person to whom such plot, apartment or buildings, as the case may be, is given on rent;

SEC. 2 DEFINITIONS (zg) (ii) (iii) (iv) (vi) "Person" includes, — an individual; a Hindu undivided family; a company; or the LLP Act, 2008, as the case may be; a competent authority; individuals whether incorporated or not; (vii) relating to co-operative societies; (viii)any such other entity as the appropriate Government may, by notification, specify in this behalf;

PARTIES ON WHOM OBLIGATIONS ARE MADE APPLICABLE under RERA 1. Promoter Land Owner RE Agents, Professionals Contractors and other Agencies Connected with RE Projects Builder / Developer Single 3. Allotees (Flat Buyer/s ) Group 1. Individual, 2. Firm. 3. Company, 4. Assn of Persons, 5. Govt. , 6. Semi Govt. 8. Local Authority 9. Trust 10. Society – u/SRA, 11. Co-operative Society u/ MCS of MSC 12. LLP or any other person or group of persons.

SEC. 2 DEFINITIONS

APARTMENTS = INDEPENDENT UNIT/PLOT Residential Flat Office Shop Garage Bunglow Any Constructed Developoped or to be Constructed Plot Structure Industrial Gala Office Provided or agreed to be provided by the Promoter To the Purchaser for a Consideration

SEC. 2 DEFINITIONS (j) "building" includes any structure or erection or part of a structure or erection which is intended to be used for residential, commercial or for the purpose of any business, occupation, profession or trade, or for any other related purposes; (s) "development" with its grammatical variations and cognate expressions, means carrying out the development of immovable property, engineering or other operations in, over or under the land or the making of any material change in any immovable property or land includes redevelopment; ;

SEC. 2 DEFINITIONS (zk) "promoter" means, — (i) a person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignees; or (ii) a person who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon; or

SEC. 2 DEFINITIONS (iii) any development authority or any other public body in respect of allottees of— (a) buildings or apartments, as the case may be, constructed by such authority or body on lands owned by them or placed at their disposal by the Government; or (b) plots owned by such authority or body or placed at their disposal by the Government; for the purpose of selling all or some of the apartments or plots, or an (iv) society and a primary co-operative housing society which constructs apartments or buildings for its Members or in respect of the allottees of such apartments or buildings; or

SEC. 2 DEFINITIONS

PARTIES ON WHOM OBLIGATIONS ARE MADE APPLICABLE under RERA 1. Promoter Land Owner RE Agents, Professionals Contractors and other Agencies Connected with RE Projects Builder / Developer Single 3. Allotees (Flat Buyer/s ) Group 1. Individual, 2. Firm. 3. Company, 4. Assn of Persons, 5. Govt. , 6. Semi Govt. 8. Local Authority 9. Trust 10. Society – u/SRA, 11. Co-operative Society u/ MCS of MSC 12. LLP or any other person or group of persons.

SEC. 2 DEFINITIONS: 2(b) "advertisement" means : - any document described or issued as advertisement through - any medium and includes any notice, circular or - other documents or publicity in any form, - informing persons about a real estate project, or - offering for sale of a plot, building or apartment or - inviting persons to purchase - in any manner such plot, building or apartment or - to make advances or deposits for such purposes; (zl) "prospectus"means any document described or issued as a prospectus or any notice, circular, or other document offering for sale or any real estate project or inviting any person to make advances or deposits for such purposes;

SEC. 2 DEFINITIONS 2(c) "agreement for sale" means : an agreement entered into between the promoter and the allottee; Mah Rules 10(1) For the purpose of sub-section (2) of section 13, the agreements for sale shall be in conformity with the provisions, rules and regulations made thereunder and shall be in accordance with the model form of agreement at Annexure ‘A’. Nothing in this sub-rule shall be deemed to prevent the promoter to modify the model form of Agreement for Sale at Annexure ‘A’ provided that such agreement is in conformity with the provisions of sub- section (2) of section 13 of the Act and the rules and regulations made thereunder.

SEC. 2 DEFINITIONS

SEC. 2 DEFINITIONS (p)"competent authority" means the local authority or any authority created or established under any law for the time being in force by the appropriate Government which exercises authority over land under its jurisdiction, and has powers to give permission for development of such immovable property; (zc) Corporation or Municipality or Panchayats or any other Local Body constituted under any law for the time being in force for providing municipal services or basic services, as the case may be, in respect of areas under its jurisdication;

SEC. 2 DEFINITIONS

SEC. 2 DEFINITIONS (q)"completion certificate" means the completion certificate, or such other certificate, by whatever name called, issued by the competent authority certifying that the real estate project has been development according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws; "occupancy (zf) occupancy certificate" the means certificate, or such other certificate by whatever name called issued by the competent authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructure such as water, sanitation and electricity;

SEC. 2 DEFINITIONS (n) "common areas" mean— (i) the entire land for the real estate project or where the project is developed in phases and registration under this Act is sought for a phase the entire land for that phase; (ii) escapes, and common entrances and exits of buildings; (iii) the common basements, terraces, parks, play areas, open parking areas and common storage spaces; (iv) the premises for the lodging of persons employed for the management of the property including accommodation for watch and ward staffs or for the lodging of community service personnel;

SEC. 2 DEFINITIONS (v) electricity, gas, water and sanitation, airconditioning and incinerating, system for water conservation and renewable energy; (vi) the water tanks, sumps, motors, fans, compressors, ducts and all apparatus connected with installations for common use; (vii) provided in the real estate project; (viii)all other portion of the project necessary or convenient for its maintenance, safety, etc. and in common use; (ix) infrastructure such as educational health and other public amenities or any other work in a project for its benefit, as per sanctioned plans;

SEC. 2 DEFINITIONS (v) "estimated cost of real estate project" means the total cost involved in developing the real estate project and includes the land cost, taxes, cess development and other charges; (y) "garage" means a place within a project having a roof and walls on three sides for parking any vehicle, but does not include an unenclosed or uncovered parking space such as open parking areas; (z) "immovable property" includes land, buildings, rights of ways, lights or any other benefit arising out of land things attached to the earth or permanently fastened to anything which is attached to the earth, but not standing timber, standing crops or grass;

SEC. 2 DEFINITIONS

SEC. 2 DEFINITIONS (zm) negotiates or acts on behalf of one person in a transaction of transfer of his plot, apartment or building, as the case may be, in a real estate project, by way of sale, with another person or transfer of plot, apartment or building, as the case may be, of any other person to him and receives remuneration or fees or any other charges for his services whether as commission or otherwise and includes a person who introduces, through any medium, prospective buyers and sellers to each other for negotiation for sale or purchase of plot, apartment or building, as the case may be, and includes property dealers, brokers, middlemen by whatever name called;

CHAPTER II REGISTRATION OF REAL ESTATE PROJECT AND REGISTRATION OF REAL ESTATE AGENTS 3. Real Estate Regulatory Authority. 4. Application for registration of real estate project. 5. Grant of registration. -Within 30 days 6. Extension of registration. 7. Revocation of registration. – On default 8. Obligation of Authority consequent upon lapse of or on revocation of registration. 9. Registration of real estate agents. 10. Functions of real estate agents.

CHAPTER III: FUNCTIONS AND DUTIES OF PROMOTER 11. 12. 13. 14 15 16. 17. 18. 19. Functions and duties of promoter. Obligations of promoter regarding veracity of advertisement or prospectus. No deposit or advance to be taken by promoter without first entering into agreement for sale. Adherence to sanctioned plans and project specifications by the promoter. Obligations of promoter in case of transfer of a real estate project to a third party. Obligations of promoter regarding insurance of real estate project. Transfer of title. Return of amount and compensation. CHAPTER IV RIGHTS AND DUTIES OF ALLOTTEES Rights and duties of allottees.

Disclaimer All the efforts are made to cover the important provisions of the law. The material contained herein is not exhaustive, generalizations. The and latest contains Provisions certain and Notifications must be viewed. The presenter is not responsible for any loss incurred on the actions taken based on the material presented. CA. Shilpa Shinagare -----47